Guest columnist Rudy Perkins: Trump’s tariffs a stealth tax

President Donald Trump

President Donald Trump AP PHOTO/EVAN VUCCI

By RUDY PERKINS

Published: 07-05-2025 12:01 PM

One of the least discussed reasons Donald Trump is pushing tariffs is that wide-ranging tariffs will act much like a regressive national sales tax, shifting more of the national tax burden onto low- and middle-income taxpayers, and away from the wealthy. Lower-income Americans, who spend more of their income on everyday goods, instead of, say, corporate stocks, will end up paying a disproportionate share of the tariffs.

This stealth tax increase on lower-income Americans could slip in under the political radar, transferring more wealth to the rich before the rest of us even realize we’ve been attacked. The stealth of the attack is critical.

That’s why the Trump White House denounced as “hostile and political” Amazon’s reported plan to separately list Trump’s tariff costs for goods it sells. Trump apparently didn’t want those tariff taxes to be visible to the American consumers who will be paying them.

Trump unconvincingly argued that China and other exporters would pay his tariffs, not American consumers. Walmart demolished that fiction when it announced that it would have to raise prices “given the magnitude of the tariffs.” Trump threw a little fit over this, insisting that Walmart and China should “EAT THE TARIFFS” (wanting Walmart to help Trump hide the negative impacts of his own tariffs).

Trump did not explain why any importing U.S. company would have to “EAT THE TARIFFS,” if foreign exporters like China actually pay the tariffs, as he’s claimed.

In reality, it’s the importer who’s legally responsible to pay the tariffs (unless private contracts reassign that responsibility). Many importers simply pass all or part of those tariff costs on to their American consumers, raising prices and potentially adding to inflation, a fact many American voters are belatedly waking up to. China won’t be paying the Trump tariffs, we will be.

America’s income tax is ostensibly structured to be progressive, with higher earners who can afford more tax paying greater percentages of their incomes. But a regressive tariff scheme is inherently unfair, making low- and middle-income taxpayers indirectly pay a greater percentage of their income towards tariffs than top earners.

So, it’s no surprise that billionaire Trump and some of his advisers are such fans of tariffs.

Article continues after...

Yesterday's Most Read Articles

Seniors at Hadley apartment complex plea to legislators for help as they grapple with sharp rent spikes
Home away from home: Masuda’s Cafe debuts in Amherst
Around Amherst: EV charging station survey underway, Garlic Lady dies
Soaked from below: Region confronts rising water tables unable to absorb water during more intense storms
Amherst developer, Hadley farmer pitch duel-use solar array with 1,248 panels on River Drive parcel
Area property deed transfers, July 18

Trump, for example, claimed that: “Our country was the strongest, believe it or not, from 1870 to 1913. You know why? It was all tariff-based, we had no income tax.” Trump announced “we will restore the name of a great president, William McKinley, to Mount McKinley … President McKinley made our country very rich through tariffs …”

(The White House notes President McKinley “[led] the nation to victory in the Spanish-American War and rais[ed] protective tariffs …” McKinley also presided over U.S. annexation of Hawaii, Guam, Puerto Rico, and the Philippines. Role model for anyone we know?)

Billionaire and Trump commerce secretary, Howard Lutnick, asserted that Trump’s tariff regime will allow creation of an “External Revenue Service” to deal in tariffs, instead of income tax through the Internal Revenue Service (IRS), saying: “‘Our objective, of course, is to replace the Internal Revenue Service and let those outside countries trading with us … pay their fair share to America … ” (Again, ignoring the fact it’s the importers, not the outside countries, who are legally responsible for paying the tariffs.)

Trump’s nomination of former Rep. Billy Long to be the new IRS Commissioner, is another clue where Trump wants to go with income taxes and tariffs. Long was an original co-sponsor of a bill to repeal the income tax and substitute a (regressive) national sales tax. (Besides their stealth, another advantage for Trump with tariffs over a national sales tax is that while sales taxes are usually applied fairly uniformly, tariffs are often varied based on the goods and countries involved, giving Trump much more leeway to unilaterally target, raise, lower, or postpone the financial pain involved, making tariffs useful for trying to extract economic concessions, or political compliance, from specific businesses or countries.)

You get the plan? Further gut the progressive income tax system through big cuts for the wealthy. Then launch a separate attack that shifts even more of the national tax burden onto low- and middle-income taxpayers, by substituting a regressive, tariff-based tax system for large parts of the income tax system.

A little twisted, so just remember it again this way: China won’t be paying the Trump tariffs, we will be.

Rudy Perkins lives in Amherst.